Understanding Electricity Increases and What’s Driving the Change
A Message to Our Members
Electricity powers every part of our lives, from the lights in our homes to the digital networks that connect us. As members, you’ve likely noticed that the cost of goods and services continues to rise, and we understand that this is concerning. Like you, we’re feeling the impact of higher costs across the board.
This special edition of Current Connection is designed to explain what’s happening in the energy industry, why it matters, and what Crow Wing Power is doing to protect safety and reliability for our members.
A Nation Powering Up
Across the country, electricity demand is climbing faster than it has in decades. Several major trends are driving this surge.
Explosive Data Growth
Artificial intelligence (AI), cryptocurrency, and cloud computing are reshaping how electricity is used. Data centers—the massive facilities that power our online world—are projected to increase their total electricity use by 65% by 2050 (Electric Cooperative Network, 2024).
Manufacturing Comes Home
New federal incentives are driving manufacturing back to the United States, adding another layer of energy demand. Factories that produce electric vehicles, batteries, semiconductors, and solar power components are expected to use 13,000 gigawatt-hours (GWh) more power each year (Brattle Group, 2024).
Did you know?
One gigawatt can power approximately 750,000 average homes for a year.
More Homes, More Usage
As population and economic growth continue, residential energy use is projected to rise 14% to 22% by 2050. Everyday life is becoming more electric—from vehicles and tools to heating and appliances.
Electrification Everywhere
The transition toward electrification of homes, vehicles, and industries means greater reliance on the power grid. Analysts predict that U.S. peak demand will grow by at least 38 gigawatts (GW) over the next five years—nearly double what was forecast just a few years ago (U.S. Energy Information Administration, 2024).
Building Tomorrow’s Grid
To meet these growing needs, experts agree the United States must build thousands of miles of new and upgraded transmission lines. These lines connect where power is produced, whether from wind, solar, or traditional generation sources—to where it’s needed most.
However, that progress comes with significant challenges:
- Permitting delays: Large projects can take up to 10 years from planning to completion.
- Supply chain shortages: Essential materials like steel, copper, and transformers remain in short supply, driving costs higher.
- Policy uncertainty: Shifting federal regulations can add complexity and increase costs for utilities and cooperatives.
- An aging grid: Nearly 70% of America’s power grid was built more than 25 years ago and requires modernization to handle today’s technology and extreme weather demands.
Our Wholesale Power Provider
Rate pressure also comes from our wholesale power provider, Basin Electric Power Cooperative, which is investing $11 billion in capital projects over the next decade. These investments will strengthen infrastructure, update technology, and ensure reliability as demand continues to grow, ensuring your access to reliable power generation.
To understand today’s costs, consider that the expense of constructing one mile of power line is now more than double what it was 10 years ago. This increase reflects the higher costs of materials, labor, and equipment needed to maintain reliable service.
Basin Electric’s rate increases are driven by four primary factors:
- Growth in traditional load: New generation and transmission projects are more expensive than existing infrastructure.
- Investments in reliability: Upgrades to facilities and systems are reducing outage times and improving grid performance.
- Increased planning reserve margins: Regional power authorities are requiring higher reserves to ensure grid stability.
- Technology and modernization: Continued investment in advanced systems is necessary to maintain long-term reliability.
Your Cooperative Commitment
It’s important to remember that Crow Wing Power is a not-for-profit cooperative. We do not profit from member rates—every dollar collected is reinvested into maintaining the grid, purchasing power, and serving our members.
Our focus remains on four key priorities:
- Safety: Ensuring that members and employees remain safe around electricity through planning, infrastructure maintenance, and a culture of doing things the right way.
- Reliability: Investing in upgrades and technology to keep power dependable in every season.
- Cost-competitiveness: Reviewing every project and contract to maintain fair, competitive pricing.
- Transparency: Keeping members informed about what’s changing and why.
We understand that higher costs can create real challenges for families and businesses. Our team is here to help members find ways to save through energy efficiency programs, rebates, and budget billing options that can make monthly costs more predictable.
Looking Ahead
The energy landscape is evolving rapidly, but our cooperative values have not changed. Crow Wing Power continues to take proactive steps to plan for future demand while balancing today’s financial realities.
As the world becomes more electric, we’ll continue working to keep the power flowing—safely and reliably for generations to come.
References
Brattle Group. (2024). Electricity demand growth and forecasting in a time of change. Retrieved from https://www.brattle.com
Electric Cooperative Network. (2024, June). Soaring Demand—Infographic. National Rural Electric Cooperative Association. Retrieved from https://www.cooperative.com
U.S. Energy Information Administration. (2024). Annual Energy Outlook 2024. U.S. Department of Energy.